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Toronto engineer Laura Chiu just likes the way Lululemon clothing is put together.

“Lululemon works. The clothes are designed for each sport with unique features,” she told the Star on Friday.

The Vancouver-based yoga wear maker, which in a decade has turned into a marketing phenomenon, cemented its position on Friday when it posted second quarter profits more than double the same period last year.

“They have really good marketing, but the clothes fit very well,” said Chiu, 28. “They make your butt look really good. The clothes are tailored to women's bodies. Even though they’re expensive, I figure I may as well go for Lululemon because of the way the clothes are made.”

Rosie Connor’s small Dear Lil’ Devas company in Toronto hand sews its line of cotton, hemp and bamboo yoga clothing. A world away from the global scope of Lululemon, she still appreciates what they’ve done.

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“They took yoga clothing outside of the studio, so I appreciate Lululemon in many ways,” she said. “Their marketing has really reached out to the mainstream.”

With their instantly recognizable logo and reusable tote bags covered with inspirational slogans, Lululemon “is a brand,” said Connor. And yes, she said, “it is a bit of a uniform.”

The totes, said Chui, “are definitely a plus. When you see other people carrying them around, you can see your social group is also buying these things. I use the bags for everything.”

The company opened its first store in Vancouver in 1998, and has expanded to more than 100 stores in three continents in just over a decade.

"We continue to focus intently on our growth initiatives such as e-commerce, new stores and showrooms," CEO Christine Day said on a conference call with analysts Friday to discuss the phenomenal performance of the yoga and athletic wear maker.

Shares in the Vancouver-based chain shot up 11 per cent, or $4.20 to $41.26, in midday trading Friday on the Toronto Stock Exchange.

Zoe Tan, an analyst at Morningstar research, said the company's sales improvement was driven by both increased traffic and higher prices, "an admirable feat" as most retailers struggle to maintain prices in the shaky consumer environment.

"Additionally, strong performance at newer stores exceeded our expectations as the brand gains significant traction in the United States."

However, she added the pace of growth will moderate in the third quarter as the chain starts to lap tough year-over-year comparisons.

The clothing retailer (TSX:LLL) wants to open about 20 to 25 new stores and 15 showrooms next year but "we're being cautious in terms of not getting ahead of our skis and trying to get up to 35 stores for next year," Day said.

Lululemon determines which cities can support a retail store by first setting up showrooms to test the market, which it has done across North America and in Asia and Australia. Day said the company employs another yoga technique — patience — when deciding which markets are prime for a full-fledged store.

"We hold pretty darn firm to the deals that we want. We'll wait out the situation rather than do a bad one," she said.

Lululemon is on track to open a planned 46 new showrooms and 12 new stores in North America this year, and plans to focus new openings on markets where it can open three to five stores rather than a single location.

And new stores have been "knocking it out of the park," compared to what the company had expected, it said.

Lululemon reported its net profit in the second quarter ended Aug. 1 at $21.8 million or 30 cents a share, from $9.2 million or 13 cents a share for the same year-earlier period. Analysts had expected earnings of 24 cents per share.

Second-quarter revenue increased 56 per cent to $152.2 million from $97.7 million.

"Second quarter earnings were more than 85 per cent than our previous second quarter earnings peak in 2008, catching up to our pre-recession trajectory," Day said.

The company, which has 130 stores in Canada, the United States and Australia, raised its third quarter and full year outlooks.

Lululemon said it expects revenue of between $155 million to $160 million in the current quarter and diluted earnings per share of between 22 cents and 24 cents.

For the full fiscal 2010, revenues are expected to range between $645 million and $650 million and diluted earnings per share hitting $1.18 to $1.22.

After many quarters of watching inventory get snatched off shelves faster than it could be restock, the company says it has finally caught up to demand. That will mean more discounts for customers.

Lululemon also plans to launch a revamped e-commerce site after the busy holiday period.

Online sales have more than doubled in terms of percentage of overall revenue, but have been constrained by inventory problems, Day said.

"We are just scratching the surface in e-commerce and we'll continue to add resources in order to push this channel to more than 10 per cent of our sales in the near term."

The company is struggling with inflationary pressures on fabric labour and transportation which will impact the company's gross margin, but Day says there won't be price increases on any core items.

The company announced in May it had increased its interest in its Australian joint venture partner, New Harbour Yoga Pty Ltd., from 13 to 80.3 per cent for an undisclosed amount.

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